Kushal Nahata, CEO and co-founder of FarEye, discusses the importance of last-mile delivery in the context of increasing consumer demand for shorter delivery times and the surge in e-commerce sales.
According to Nahata, last-mile delivery is critical to customer loyalty, with 85% of shoppers unwilling to shop with a retailer again after a bad delivery experience. Customers want fast deliveries, delivery tracking, and ETA alerts, and they expect a smooth and seamless post-purchase experience.
Amazon has set the bar for consumers, offering low-cost last-mile delivery options, and customers now expect every company to deliver goods either same-day or within two days, often for free. Millennials and Gen Z, who have the largest share of buying power in the US, prioritize convenience in their busy lives and are the most likely to choose home delivery for their groceries, according to a recent survey by Prosper Insights & Analytics.
Gen-Z (22.4%) and Millennials (25.2%) want their groceries delivered in one or two days.
Both groups of consumers rank same day delivery as Very Important/Important to them with Gen-Z at 52.8% and Millennials at 57.5%. Gen-Z and Millennials also find free shipping Very Important/Important at 74.3% and 80.4% respectively.
Not surprisingly, according to the Prosper Insights & Analytics survey, Gen-Z (39.2%) and Millennials (33.9%) prefer contactless delivery when making a purchase. Their preferences for convenience and a positive consumer experience can make or break a brand’s reputation. This puts increased pressure on retailers to optimize their last-mile logistics.
FarEye’s “Eye on Last-mile Delivery Report” highlights that only 23% of US retailers claim they can deliver same-day or next-day, indicating that there is room for improvement in terms of delivery speed.
According to Kushal Nahata, a superior delivery for a retailer, food, and grocery or logistics provider should be low-cost, fast and on-time, flexible and adaptable, visible, and sustainable. Retailers should focus on reducing the cost-per-delivery, which includes factors such as fuel, labor, first delivery attempt failures, address location, routing, returns, and lost package costs.
While fast delivery is important, same-day delivery may not be cost-effective for retailers, and outsourcing delivery networks may help increase capacity and delivery speed. Flexibility and adaptability are essential, and retailers should have the technology to make on-the-fly changes to last-mile deliveries.
Visibility is crucial for logistics managers to track products and consumers to track their packages and make changes to delivery times and dates. Finally, retailers should make the last mile more sustainable through route optimization and making their delivery fleets greener to reduce emissions.
Drenik recently discussed the complexity of last-mile delivery with an expert in the field, Nahata. As e-commerce continues to grow, retailers are diversifying and outsourcing their delivery networks. This means partnering with couriers, gig-fleets, and postal services to enhance service for their customers.
Outsourcing allows retailers to be more flexible, increase capacity and scalability, while also providing speedier deliveries. However, outsourcing deliveries also makes last-mile delivery complex and means that retailers have to hand over control of the customer experience to their delivery partners.
Power of Last-Mile Delivery Platforms
When asked if retailers can simultaneously reduce last-mile delivery costs while pleasing consumers, Nahata explained that with the use of a last-mile delivery platform, retailers can decrease cost-per-delivery while also providing a superior customer experience.
Today’s technology, including artificial intelligence, machine learning, and automation, can tackle a variety of complex problems and integrate easily with existing processes. Simplifying the last mile and making it cost-effective while also keeping an eye towards a superior customer experience is key.
Nahata also discussed FarEye, a last-mile delivery platform that helps companies in retail, e-commerce, logistics, CEP, and food and grocery to simplify the complex last-mile delivery process. The platform provides optimized routes, real-time visibility to managers and customers, and branded customer experiences for companies using their technology.
Drenik asked Nahata if there was anything else he would like to add, to which Nahata replied that with the right delivery platform, companies can ensure that every delivery in the world reaches its destination every time, accurately, efficiently, and with minimal environmental impact.
Drenik then thanked Nahata for his insights on last-mile delivery technology and how it can help retailers reduce cost-per-delivery while also providing superior customer delivery experiences.
Kushal Nahata highlights the importance of last-mile delivery amid growing consumer expectations for faster service. Poor delivery experiences can deter customer loyalty, emphasizing the need for superior post-purchase experiences. With Amazon setting high standards, customers expect quick, often free, deliveries, especially for groceries.